The Housing Market is a MARKET!

[expat]

Thing about the housing market is, it is a market. It is subject to some rules that cannot be abolished by the government or anybody else.

For example, if there are 100,000 would-be buyers, but only 70,000 houses for sale, then 30,000 of those would-be buyers are going to be disappointed. The only question is how they will be selected by the market.

During the boom years, it was on price. When prices drop, if there are not actually more houses available to buy, those 100,000 would-be buyers cannot then all buy a house. They just can't, the houses don't exist. So I can state confidently that 30,000 unlucky would-be buyers will be selected against. I may not know how, but it will happen.

It looks like it's by making mortages hard to come by. What if the government don't like that, and lean on lenders to make them lend more (or do their own lending)? Then those unlucky 30,000, or a different 30,000, will be selected against by some other factor. I don't know what, but it will happen.

[Mich the Tester]

Thing about the housing market is, it is a market. It is subject to some rules that cannot be abolished by the government or anybody else.

For example, if there are 100,000 would-be buyers, but only 70,000 houses for sale, then 30,000 of those would-be buyers are going to be disappointed. The only question is how they will be selected by the market.

Strong case for polygamy here.

[Solidec]

Why do you think the govt wants the banks to resume mass lending? It wont be selection via credit rating and risk anymore, it will be back to price, gazumping and inflated asset bubbles. Precisely what the govt wants for us all to feel wealthy again so we will vote them back in!

[DimPrawn]

Why do you think the govt wants the banks to resume mass lending? It wont be selection via credit rating and risk anymore, it will be back to price, gazumping and inflated asset bubbles. Precisely what the govt wants for us all to feel wealthy again so we will vote them back in!

Exactly. They want a credit boom back, everyone in a bigger house, new luxury brand car with a 90" plasma on the wall, all on 0% APR for the next few years, boom, landslide victory and then let the bust recommence.

The bubble has popped. You can't inflate a burst balloon, no matter how much debt you put us, our children and our grandchildren into.

[Cyberman]

Exactly. They want a credit boom back, everyone in a bigger house, new luxury brand car with a 90" plasma on the wall, all on 0% APR for the next few years, boom, landslide victory and then let the bust recommence.

The bubble has popped. You can't inflate a burst balloon, no matter how much debt you put us, our children and our grandchildren into.

... and they had the nerve to blame bankers for irresponsible lending a few months back. GB and AD are total hypocrites !!

[BrilloPad]

Exactly. They want a credit boom back, everyone in a bigger house, new luxury brand car with a 90" plasma on the wall, all on 0% APR for the next few years, boom, landslide victory and then let the bust recommence.

The bubble has popped. You can't inflate a burst balloon, no matter how much debt you put us, our children and our grandchildren into.

Interestingly people are reining in spending : paying off mortgage debt etc. but the plebs still seem to think that GB is the man for the crisis and will see us through. or maybe the tide is turning?

[tim123]

... and they had the nerve to blame bankers for irresponsible lending a few months back. GB and AD are total hypocrites !!

I have to say I feel sorry for AD.

He wasn't in charge when the problem was created and you can tell by his body language that he often isn't happy when he's giving the "this is what Gordo want's you to hear" answer.

And more than once he's slipped into honesty.

tim

[AlfredJPruffock]

Exactly. They want a credit boom back, everyone in a bigger house, new luxury brand car with a 90" plasma on the wall, all on 0% APR for the next few years, boom, landslide victory and then let the bust recommence.

The bubble has popped. You can't inflate a burst balloon, no matter how much debt you put us, our children and our grandchildren into.

Good points - but altough you cannot inflate a burst balloon - you can always pull another out the drawer.

Think Im being funny ?

Thats what Greenspan did after the .com bubble - rather than allowing the economy to deflate post the .dot com collapse he helped to create the real estate bubble.

So - if you can think of a new bubble to replace real estate - thats all you need.

I am in favour of creating new bubbles and printing money as the Universe is expanding then so can the economy.

There is only Today.
Tomorrow - Never Knows.

[Cheshire Cat]

I heard a good description of the housing market as a loose collection of lots of related, but different markets. The implication being that different market forces act on different sectors and regions and price brackets in different ways. It might be useful for the media to clump everything together into one big housing melting pot, but anyone who works in or around the industry, will assert that it does not behave as one homogenous blob. Of course, a large scale property boom or bust will have an affect across various markets, but not in the same ways, or to the same extent, or over the same period.

Worth bearing this in mind when media report stories of "average" prices, "average" volumes of transactions, etc, etc. Your own circumstances may be significantly better, or worse.